In a bid to further differentiate itself from open source rivals, Microsoft Tuesday said it will expand its indemnification program to cover the vast majority of its customers. The move, experts said, is great marketing but will have little impact on users.

For several years, Microsoft has indemnified, or protected, its volume license customers from possible legal threats stemming from their use of Microsoft software. Last year, Microsoft lifted the monetary cap on that protection. The vendor is now extending protection to virtually all users of its products.

"This expansion will cover several million more people," said David Kaefer, director of business development at Microsoft. "We performed a review of the indemnification we offer today and came to the conclusion that there really is no reason why we would not offer it to anybody."

Microsoft's indemnification program protects customers from exposure to legal costs and damage claims related to patent, copyright, trade secret and trademark claims, the company said.

Vendor indemnification programs have emerged as part of users' risk mitigation strategies, especially in the U.S., which is widely seen as a litigious society. This is particularly true for users of Linux as The SCO Group threatened them with copyright infringement lawsuits.

"When we evaluate companies and software products, indemnification is one of the first things we look at," said Ken Meszaros, assistant vice president and infrastructure manager at LandAmerica Financial Group, a real estate transaction services provider in Richmond, Va.

"It is important that the vendor is willing to stand up for the integrity of its products," Meszaros said. "Microsoft offering indemnification for all its products, regardless of licensing strategy, is a positive change and helps to protect us from intellectual property issues."

While having a form of free insurance is always nice, Microsoft's expanded indemnification appears to be mostly a marketing move, said David Elkins, a partner in the intellectual property practice of Squire, Sanders & Dempsey LLP, in Palo Alto. Customers who could ever need protection, the largest corporations, were already covered, he said.

"Microsoft is using its financial power to enhance its marketing advantage in this particular area," Elkins said. Smaller Linux vendors can't match Microsoft's blanket indemnification because they don't have the financial means, he said.

The IDG News Service is a Network World affiliate.